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The Progressive Economics Forum

EI Claims Surge

The worst news in today’s Employment Insurance (EI) figures is that new benefit claims hit a record high. Rising numbers of unemployed workers and hence EI beneficiaries are an unsurprising result of a deteriorating labour market. However, the increase the number of new EI claims suggests that the pace of deterioration is worsening rather than easing. Despite signs of a nascent recovery of economic output, today’s figures suggest that Canada’s job market will remain grim for some time to come.

Benefit Coverage

This outlook underscores the issue of whether workers unemployed through no fault of their own will have access to EI benefits. The silver lining in today’s release is that, for the first time since the recession began, slightly more than half of unemployed Canadians appear to be receiving EI benefits.

However, in May, seasonal adjustment reduced the official unemployment figure and increased the EI-beneficiary figure. Unadjusted figures (see below) indicate that fewer than half of unemployed Canadians received benefits.

Further layoffs of long-service employees will tend to increase this proportion. But the fact that some workers who had received benefits will soon begin to run out of benefits could have the opposite effect.

EI coverage can and should be increased by reducing the number of work hours needed to qualify for benefits and by extending the weeks of benefits available to those who do qualify. Last week, Statistics Canada released a study of EI coverage. It reports that in 2008, which mostly predates the economic crisis, more than 100,000 workers who would otherwise have been eligible for EI benefits did not receive them because they had not been employed for the number of hours required in their region.

 Employment Insurance Coverage, May 2009 (seasonally-adjusted figures)

 

EI Recipients 

Unemployment  

Coverage 

Canada   

778.7   

1,548.4   

50.3 %   

Newfoundland   

41.2   

37.7   

109.2 %   

PEI  

8.9  

10.4   

85.6 %   

Nova Scotia  

33.1 

44.1   

75.1 %  

New Brunswick   

35.6 

35.1   

101.4 %  

Quebec   

206.7  

366.0   

56.5 % 

Ontario  

274.1  

670.7  

40.9 %   

Manitoba   

15.8 

31.0 

51.0 % 

Saskatchewan   

14.0  

27.1   

51.7 %  

Alberta  

57.0  

141.8   

40.2 %  

BC 

88.2 

184.5  

47.8 %  

 
Demographic Breakdown

Statistics Canada expanded today’s EI release to subdivide beneficiaries by age and gender. This breakdown was based on figures unadjusted for seasonality.

While the release highlighted the fact that more youth are receiving benefits, the proportion is still extremely low. Young workers who recently entered the workforce have the most difficulty accumulating enough hours to qualify for EI benefits. For similar reasons, unemployed women are even less likely than unemployed men to receive benefits.

Employment Insurance Coverage, May 2009 (unadjusted figures)

 

EI Recipients 

Unemployment  

Coverage 

Total  

718.2  

1,612.0 

44.6 %  

Men 25+  

421.6  

670.7  

62.9 %  

Women 25+ 

215.7  

416.0  

51.9 %  

Youth 

81.0  

525.3  

15.4 %   

 UPDATE (July 29): Quoted by The Toronto Star

Enjoy and share:

Comments

Comment from Paul Tulloch
Time: July 28, 2009, 11:58 am

Hey Erin,

Didn’t you hear the recession is over! Why are you going on about these numbers, don;t you know that employment is the last variable to come out of the recession. It is a lagging indicator, and therefore we have nothing to fear.

At least that has been the analysis so far being put out by every media economist this morning.

It is quite a beast how the analytical mind of the media seems to be working through the numbers.

Don;t worry, seems to be the catch phrase of the day.

Denial and window dressing to help prop the tories up in the public opinion polls is more likely what is behind the message.

Comment from Colleen Moore
Time: August 10, 2009, 6:38 pm

How do you know when the recession is over? What is the best indicator? What the Tories have to say or better yet the BC Liberals?
Employment is a great indicator of the recession being over and BC is at an all time high with loads and loads of unemployed immigrants. Olympic’s was looking for cash today siting the recession and British Columbians are on the hook for more cash for a recession that is supposed to be over.

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